Opposition mounts to NZME-Fairfax merger

Submissions to the New Zealand Commerce Commission on the proposed merger of NZME and Fairfax Media’s NZ assets have exposed concerns over a reduction of independent views, the establishment of a near monopoly and job losses.

The commission received 27 submissions from publishers, broadcasters and commentators on the merger.

Of those, 25 were against the proposal or said it wasn’t in the public’s interest, and two outlined conditions that should be enacted if the proposal is approved.

NZME and Fairfax contend that the merger would provide New Zealand with a strong multi-platform media company with the ability to provide high-quality, local news, sport and entertainment that would be able to compete against the likes of Facebook and Google.

However, the scale of the new entity has raised fears over the ability of the remaining independents to compete for revenue, in addition to the convergence of news sources creating monolithic content across all platforms.

Fairfax operates the largest print media network in New Zealand, featuring nine daily and three weekly newspapers, 61 community publications, 10 magazine titles and six websites, including stuff.co.nz. It also has a minority shareholding in social media site Neighbourly.

NZME owns eight daily and two weekly newspapers, 24 community publications, six magazine titles, 10 radio stations and 38 websites, including nzherald.co.nz. As well as websites related to its print and radio offerings, NZME owns a number of individual websites such as Grabone, Shop Green and Adhub.

The commerce commission will rule on the proposed merger by March 15, 2017.

Inside NZME Central, the company’s new Auckland facility

Dr Gavin Ellis – a media academic, former editor-in-chief of the NZ Herald and NewsMediaWorks columnist – submitted that the editorial reorganisation that would follow the merger represented a potential loss of editorial independence at community, regional and metropolitan levels.

“The structure that I believe will be employed in the post-merger period facilitates centralised control, the aggregation of power, and the potential loss of journalistic self-determination,” he said.

“I believe that the potentially detrimental effects of editorial consolidation and restructuring cannot be left to the good intention of the combined group. I submit that there must be enforceable guarantees of editorial independence at national, metropolitan, regional and local levels.”

“I believe that the potentially detrimental effects of editorial consolidation and restructuring cannot be left to the good intention of the combined group.”
Dr Gavin Ellis

Dr Ellis said the domination of the Press Council by an NZME/Fairfax group should be acknowledged by the commerce commission in the event of approval, and that it recommend to government an urgent review of media regulation.

“In the absence of such a recommendation, I submit that the commission should make it a condition of approval that the merged group agree to place editorial independence under the oversight of the Press Council and the Broadcasting Standards Authority”. He also suggested and the Online Media Standards Authority be given the same oversight, should the new group decide to place itself under scrutiny of that body.

Allied Press, publisher of The Otago Times, as well as a stakeholder in community newspapers and regional television, contended that the amalgamation would disadvantage the New Zealand public.

“There would be a material reduction in the number of journalism staff employed by the merged entity,” it said. “Separate, competitive, analysis and comment by the two existing entities on political, business and public interest issues would be lost with a single entity.

“The merged entity, through its stronger ability to unify and aggregate news and opinions across its sites would be prejudicial to the public interest.”

Horton Media, a major New Zealand print company, submitted the merger would create NZ’s first newspaper monopoly and should be rejected on the terms it has proposed. “The application results in a substantial lessening of competition for the provision of print advertising services in the Auckland area in particular,” it said. “Print advertising is a distinct market that complements marketers’ other media choices, including online.”

Under the merger, the new entity appeared to have retained substantial volumes for certain marketing segments such as real estate and national retail advertising, Horton said. “The resulting monopoly in the provision of print advertising services would preclude the prospect of any new entrant in the Auckland region. A potential competitor would be unable to attain the scale and reach of either the NZ Herald or Fairfax’s Auckland Suburban Newspaper network, let alone a combination of the two.”

Wellington Suburban Newspapers and the Blenheim Sun said the proposed merger was not in the best interests of the existing print media industry. “If this merger is approved as outlined it will open up the possibility for a monopolistic news service, covering radio and print, giving New Zealanders a poor service,” it said.

“Digital news choices would be reduced to one source, currently Stuff and NZ Herald, only one will survive. This has come about through poor business planning and has had a major impact on both their primary newspaper media.”

This theme resonated through the submissions of a number of other independent publishers

The North Canterbury Radio Trust opposed the merger on the grounds of the reduction in diversity of news and views expressed in print, on air and in digital media, and the likely reduction in employment in all areas of the industry.

“New Zealand is a small media market. The creation of one big media company is likely to increase competition for the limited revenues available, and squeeze out small, independent and regional operations. “